Thai Airways International Public Company Ltd v FaragMenzies Aviation Group (Ground Services) Australia Pty Ltd v Thai Airways International Public Company Ltd

[2011] NSWCA 172

Court of Appeal

New South Wales

Case Title:

Thai Airways International Public Company Ltd v FaragMenzies Aviation Group (Ground Services) Australia Pty Ltd v Thai Airways International Public Company Ltd

Medium Neutral Citation:

[2011] NSWCA 172

Hearing Date(s):

17 June 2011

Decision Date:

17 June 2011

Jurisdiction:

Before:

Bathurst CJ at 1 & 27 ;  Allsop P at 25 ;  Tobias AJA at 26

Decision:

In the matter 2010/99972-04:
1.Grant the applicants leave to appeal.
2.Order that within 14 days the applicants file a Notice of Appeal in the form contained behind Tab 6 of the White Book filed in connection with the application for Leave to Appeal.
3.Allow the appeal.
4.Order that the appellants and the first and second respondents within 28 days execute a Deed of Release in the form of the Deed of Release which is Annexure "I" to the affidavit of Mark Gray-Spencer sworn 11 June 2010 and filed in District Court proceedings 2010/00099972.
5.Order that within 7 days following the execution of the Deed of Release the first respondent file a Notice of Discontinuance of District Court proceedings 2010/00099972 so far as they are brought against the appellants and the second respondent.
6.Order that the first respondent pay the costs of the appellants and the second respondent in the court below to the extent that such costs were incurred after 9 May 2010.
7.Order that the first respondent pay the costs of the claimants and the second respondent of the application for leave to appeal and the appeal.
8.Grant the first respondent a certificate under the Suitors' Fund Act 1951 in respect of the costs of the appeal if otherwise qualified.
In matter 2010/99972-05 I would make the following orders:
1.Grant the applicant leave to appeal.
2.Order that within 14 days the applicant file a Notice of Appeal in the form contained behind Tab 6 of the White Book filed in connection with the application for Leave to Appeal.
3.Allow the appeal.
4.Order that the appellant and the first, second and third respondents within 28 days execute a Deed of Release in the form of the Deed of Release which is Annexure "I" to the affidavit of Mark Gray-Spencer sworn 11 June 2010 and filed in District Court proceedings 2010/00099972.
5.Order that within 7 days following the execution of the Deed of Release the first respondent file a Notice of Discontinuance of District Court proceedings 2010/00099972 so far as they are brought against the appellant and the second and third respondents.
6.Order that the first respondent pay the costs of the appellant and the second and third respondents in the court below to the extent that such costs were incurred after 9 May 2010.
7.Order that the first respondent pay the costs of the appellant and the second and third respondents of the application for leave to appeal and the appeal.
8.Grant the first respondent a certificate under the Suitors' Fund Act 1951 in respect of the costs of the appeal if otherwise qualified.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

CONTRACTS - general contractual principles - repudiation - agreement to settle legal proceedings - party imposed time limit upon execution of settlement documents - whether imposition of time limit constituted repudiation

PROCEDURE - civil - power of court to determine disputes concerning settlement and to make consequential orders - Civil Procedure Act 2005 (NSW), s 73

Legislation Cited:

Crimes (Aviation) Act 1991 (Cth)
Aviation Transport Security Regulations 2005 (Cth)
Civil Procedure Act 2005 (NSW), s 73
Suitors' Fund Act 1951 (NSW)

Cases Cited:

DTR Nominees Pty Limited v Mona Homes Pty Limited [1978] HCA 12; (1978) 138 CLR 423
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61; (2007) 233 CLR 115
Laurinda Pty Limited v Capalaba Park Shopping Centre [1989] HCA 23; (1989) 166 CLR 623

Texts Cited:

Category:

Principal judgment

Parties:

In 2010/9997204:
Menzies Aviation Group (Ground Services) Australia Pty Limited (First Applicant)
Vijay Kumar (Second Applicant)
Markos Farag (First Respondent)
Thai Airways International Public Company Limited (Second Respondent)

In 2010/9997205:
Thai Airways International Public Company Limited (Applicant)
Markos Farag (First Respondent)
Menzies Aviation Group (Ground Services) Australia Pty Limited (Second Respondent)
Vijay Kumar (Third Respondent)

Representation

- Counsel:

Counsel
In 2010/9997204:
Mr P W Gray SC, Mr M Richardson (Applicants)
Mr R Rasmussen (First Respondent)

In 2010/9997205:
Mr P W Gray SC, Mr A T S Dawson (Gray & Dawson) (Applicant)
Mr R Rasmussen (First Respondent)

- Solicitors:

Solicitors
In 2010/9997204:
Norton Rose Australia (Applicants)
Georgiou & Co (First Respondent)
Riley, Gray-Spencer Lawyers (Second Respondent)

In 2010/9997205:
Riley, Gray-Spencer Lawyers (Applicant)
Georgiou & Co (First Respondent)
Norton Rose Australia (Second and Third Respondents)

File number(s):

2010/9997204;  2010/9997205

Decision Under Appeal

- Court / Tribunal:

District Court

- Before:

Elkaim SC DCJ

- Date of Decision:

02 December 2010

- Citation:

- Court File Number(s)

2010/00099972

Publication Restriction:

Judgment

BATHURST CJ: The facts in this case are uncontroversial.

1. The first respondent, Mr Markos Farag, who for convenience I will describe as the plaintiff, instituted defamation proceedings against the other parties to the application. The alleged cause of action apparently arose out of evidence given before and during committal proceedings in respect of certain charges laid against Mr Farag under the Crimes (Aviation) Act 1991 (Cth) and the Aviation Transport Security Regulations 2005 (Cth) .

1. In April 2010 the solicitors for the respective parties, with the exception of the first defendant Mr Faeli, corresponded with a view to exploring settlement.

1. On 23 April 2010 Ms Paton of Georgiou & Co, the solicitors for Mr Farag, sent an email to Ms Janis of Norton Rose, the solicitors for the applicants, Mr Kumar and Menzies Aviation Group (Ground Services) Australia Pty Ltd, who for convenience I will describe as the second and third defendants, which so far as relevant was in the following terms:

"The Plaintiff is prepare[d] to discontinue the proceedings forthwith, with no order as to costs.

This offer will remain open until 4 pm on Monday 3 May 2009. If the offer is not accepted, amended pleadings are filed and the Plaintiff is ultimately successful, he will rely on this offer on the question of costs."

1. On 27 April 2010 Ms Janis responded in a letter which so far as relevant stated as follows:

"Nonetheless, in the interests of a commercial and speedy resolution of the proceedings they [Ms Janis' clients] have agreed to accept your client's offer, on the condition that:

1. your client enters into a Deed of Release with our clients (and with the Fourth Defendant if appropriate) which provides that it will operate as a bar to any further proceedings commenced by your client against our clients and in which your client releases our clients from any future claims or actions which relate to the subject matter of these proceedings.

2. consent orders are filed dismissing the proceedings with no order as to costs within 7 (business) days of the date of this letter.

In the alternative to a Deed of Settlement being entered into, our clients will agree to judgment being entered in their favour."

1. On the same day Mr Mark Gray-Spencer, the solicitor for Thai Airways International Public Company Limited, which I will describe as the fourth defendant, wrote to Ms Paton in a letter which provided as follows:

"However, in the interests of reaching an efficient and commercial resolution of the proceedings, our client is prepared to consent to:

1. A judgment and verdict being entered for the fourth defendant with each party to bear their own costs; or

2. A discontinuance of the proceedings with each party to bear their own costs following the execution by the plaintiff of a Deed of Release which will operate as a bar to any further proceedings commenced by your client against our client and which releases our client from any future claims or actions which in any way relate to the subject of these proceedings

provided that the judgment and verdict or Notice of Discontinuance is filed by Thursday, 6 May 2010 and settlement is agreed with the second and third defendants on the same basis."

1. On 28 April 2010 Ms Paton emailed each of Ms Janis and Mr Gray-Spencer accepting the offers made by them in their respective letters of 27 April 2010 and asking them to draft a deed of release for approval, execution and return.

1. On 29 April 2010 Ms Janis forwarded an email to Ms Paton enclosing a draft deed of release which she stated had been agreed to by each of the second, third and fourth defendants. The letter stated that the fourth defendant would confirm that separately and went on to state as follows:

"Provided the attached Deed is executed by the parties no later than by 4 pm 5 May 2010, the Defendants are content for consent orders dismissing the proceedings being filed within 7 days of the execution of the Deed.

We will now await confirmation that the Deed has been signed, after which time we will arrange a mutually convenient time for exchange (before 5 May 2010)."

1. On the same date a solicitor in the employ of the solicitors for the fourth defendant forwarded an email to Ms Paton in the following terms:

"We confirm that our client agrees with the Deed of Release submitted by Ms Janis in the email below.

Please advise when the Deed has been signed and a suitable time for exchange (before 5 May 2010)."

The email referred to below was Ms Janis' email to Ms Paton of the same day. On 5 May 2010 Ms Janis attempted to contact Ms Paton on a number of occasions but she was unwell and did not return the calls.

1. As a consequence, Ms Janis forwarded an email to the plaintiff copied to Ms Paton in the following terms:

"We note that we informed you that our client would agree to your settlement offer provided the Deed of Release was executed before today.

To date we have not received any response from your solicitor or from you.

We have attempted to contact your solicitor on several occasions and were today informed by her assistant that she is unwell.

Would you please advise as a matter of urgency whether you intend to proceed with the settlement and if so, whether you have now executed the Deed.

If we do not receive a response we will assume that you are no longer interested in proceeding with the settlement."

1. On 6 May 2010 Ms Paton sent a facsimile to Ms Janis inquiring as to whether she acted for Mr Faeli. The facsimile did not deal at all with the proposed settlement.

1. On 7 May 2010 Ms Janis wrote to Ms Paton a letter which relevantly stated as follows:

"We note that although your client accepted our clients' counter-offer on 28 April 2010, we have not received a response in relation to the Deed of Release proposed by us, or to our telephone messages and emails referred to above. We have however received an open communication with you yesterday asking us to advise whether we act for, or continue to employ, the First Defendant [Ms Paton was there referring to Mr Faeli] ...

For the avoidance of doubt, Menzies Aviation Group, the Third Defendant, does not wish to be in a position in which it must later defend proceeding brought against the First Defendant in which it may be suggested (which is denied) that it is vicariously liable. Accordingly it requires a release from any claims which may be brought by your client against him.

Now that the above has been clarified we require you to advise no later than by 4pm Monday, 9 May 2010 whether your client intends to proceed in accordance with the settlement which has been agreed between the parties ...

In the event we do not receive a response, or your client does not proceed with the settlement, we put you on notice that we will rely on this letter together with our without prejudice correspondence to date to seek an order that your client pay our clients [sic] costs on an indemnity basis from the date your client's offer of settlement was accepted by our client.

Our clients also reserve their right to enforce the settlement which has been agreed between the parties."

1. On 11 June 2010 the fourth defendant filed a motion seeking various orders pursuant to s 73 of the Civil Procedure Act 2005. Those orders included a declaration that the proceedings so far as they concerned the second, third and fourth defendants had been resolved on 28 April 2010, an order that the proceedings be dismissed and an order that the parties execute the draft deed of release. It also sought an order that the plaintiff pay the second, third and fourth defendants' costs incurred in the conduct of the proceedings after 28 April 2010 and the costs of the notice of motion.

1. Section 73 of the Civil Procedure Act 2005 empowers a court having jurisdiction in a proceeding to determine disputes concerning settlement and to make consequential orders.

1. In a judgment delivered on 2 December 2010 His Honour Judge Elkaim SC dismissed the motion. He noted that all parties accepted that an agreement had been reached by 28 April 2010. Further it was not contended, at least at that time, that the deed of release which was forwarded on the following day did other than reflect the agreement which had been reached.

1. However, his Honour held that the second, third and fourth defendants had repudiated (or perhaps more accurately renounced) the agreement by the inclusion in the email forwarding the deed of release in the sentence:

"Provided the attached deed is executed by the parties by no later than 4pm 5 May 2010 the defendants are content for consent orders dismissing the proceedings being filed within 7 days of execution of this deed."

1. Although the learned trial judge did not expressly state this he seems to have assumed that the solicitors for the fourth respondent adopted the same proviso on behalf of their clients.

1. The learned District Court judge held that there was a repudiation because the letter of 29 April 2010 imposed "a new condition on the acceptance of the plaintiff's offer, namely, that the Deed of Release had to be executed by 5 May 2010".

1. In my opinion, his Honour was incorrect in so finding. For there to be a repudiation or renunciation the conduct of the party said to have repudiated the agreement must evince an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party's obligations: Laurinda Pty Limited v Capalaba Park Shopping Centre Pty Limited [1989] HCA 23; (1989) 166 CLR 623 at 634; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61; (2007) 233 CLR 115 at [44].

1. The email, in my view, did no more than provide a mechanism by which the settlement could be implemented. The offer which was accepted provided no time limit for the execution of the deed of release although it is apparent, at least from the letter from the solicitors for the fourth defendant, that it was envisaged that it would be signed prior to the filing of the notice of discontinuance. The email which stated the second and third defendants were content for the consent orders to be filed by 12 May 2010 does not, in my opinion, exhibit an intention not to be bound by the agreement which was reached. This is further evidenced, in my opinion, by the letter from Ms Janis of 9 May 2010.

1. With respect to the learned District Court judge, describing the letter of 29 April 2010 as imposing a new condition tends to obscure the ultimate test: namely, whether the letter including what was described as a condition evinced the requisite intention referred to in the authorities. In my opinion it did not.

1. Even if the email of 29 April 2010 was in fact proceeding on a false premise or contained an additional condition, it would not follow that it constituted a repudiation of the agreement. In my view, it could not be said that the second, third and fourth defendants would not have accepted performance of the contract according to its tenor had the plaintiff called upon them to do so: see DTR Nominees Pty Limited v Mona Homes Pty Limited [1978] HCA 12; (1978) 138 CLR 423 at 432.

1. It follows, in my opinion, that the settlement agreement remained binding on the parties after 28 April 2010 and leave to appeal should be granted and the appeal should be allowed.

1. I should add that counsel for the first respondent during the course of his submissions sought to argue that the inclusion in the deed of release of a release of the second, third and fourth defendants' liability to the first defendant also amounted to a repudiation of the agreement. The Court rejected leave to raise this point at this stage. It is a matter that should have been raised before the District Court judge. It is possible that evidence could have been adduced to deal with the issue or, indeed, once raised the applicants could have indicated that they were prepared not to insist on that provision. For those reasons, it was my opinion that leave should be refused.

1. In the circumstances, I would propose the following orders:

In the matter 2010/99972-04:

1. Grant the applicants leave to appeal.

2. Order that within 14 days the applicants file a Notice of Appeal in the form contained behind Tab 6 of the White Book filed in connection with the application for Leave to Appeal.

3. Allow the appeal.

4. Order that the appellants and the first and second respondents within 28 days execute a Deed of Release in the form of the Deed of Release which is Annexure "I" to the affidavit of Mark Gray-Spencer sworn 11 June 2010 and filed in District Court proceedings 2010/00099972.

5. Order that within 7 days following the execution of the Deed of Release the first respondent file a Notice of Discontinuance of District Court proceedings 2010/00099972 so far as they are brought against the appellants and the second respondent.

6. Order that the first respondent pay the costs of the appellants and the second respondent in the court below to the extent that such costs were incurred after 9 May 2010.

7. Order that the first respondent pay the costs of the claimants and the second respondent of the application for leave to appeal and the appeal.

8. Grant the first respondent a certificate under the Suitors' Fund Act 1951 in respect of the costs of the appeal if otherwise qualified.

In matter 2010/99972-05 I would make the following orders:

1. Grant the applicant leave to appeal.

2. Order that within 14 days the applicant file a Notice of Appeal in the form contained behind Tab 6 of the White Book filed in connection with the application for Leave to Appeal.

3. Allow the appeal.

4. Order that the appellant and the first, second and third respondents within 28 days execute a Deed of Release in the form of the Deed of Release which is Annexure "I" to the affidavit of Mark Gray-Spencer sworn 11 June 2010 and filed in District Court proceedings 2010/00099972.

5. Order that within 7 days following the execution of the Deed of Release the first respondent file a Notice of Discontinuance of District Court proceedings 2010/00099972 so far as they are brought against the appellant and the second and third respondents.

6. Order that the first respondent pay the costs of the appellant and the second and third respondents in the court below to the extent that such costs were incurred after 9 May 2010.

7. Order that the first respondent pay the costs of the appellant and the second and third respondents of the application for leave to appeal and the appeal.

8. Grant the first respondent a certificate under the Suitors' Fund Act 1951 in respect of the costs of the appeal if otherwise qualified.

1. ALLSOP P: I agree with the Chief Justice.

1. TOBIAS AJA: I also agree with the orders proposed by the Chief Justice for the reasons he has given.

1. BATHURST CJ: The orders of the Court are the orders which I have proposed.

**********